Sunday, August 22, 2010

Financial sector oversight committee in the offing

For a beetter policy coordination among the regulatory authorities, the finance ministry has decided to form a Financial sector oversight committee headed by the finance minister.
The committee will have the chiefs of all the regulatory auhtorities -- Nepal Rastra Bank (NRB), Securities Board of Nepal (Senon) and Beema Samiti (Insurance Board) apart from finance secretary as the members to chalk out a uniform regulation and have regular policy interaction among themselves.
"The regular coordination among the money market, capital market and insurance market has been felt," said Keshav Acharya, senior advisor at the Finance Ministry. "In the last one decade, the financial market has expanded and there needs a policy coordination to better manage them," he said, adding "as their decisions affact each other, there should be a regular interaction among themselves to better develop the financial market."
"The committe could have been formed by the minsiterial decision but the finance ministry wanted it to make a permanent structure," Acharya said adding that the committee is going to get cabinet approval.
Currently, there has been a lots of confusion among the institutions on whose guidelines to follow -- due to lack of coordination among the regulatory authorities -- as there are some contradictory regulations.
According to the central bank -- the regultor of the banks and financial institutions (BFIs), they have to publish their financial reports within a month. But according to the Securities Board of Nepal (Sebon) regulation, a listed company has to publish its financial report within 35 days. Most of the BFIs are listed in the secondary market and they have to follow both the regulator -- the central bank and Sebon and most of them are following the Sebon regulation on financial statements publications.
Simalarly, the central bank wants to end cross holding of shares but according to Sebon, the issue manager has to underwrite the 50 per cent share, if all the primary issue is not subscribed. "The committee will look after such contradictory regulations and make them uniform," Acharya said.

No comments: